Zimbabwe ditched its local currency and now plans to adopt the Chinese yuan

In a fascinating move, Zimbabwe has announced a
plan to adopt the Chinese yuan as its official currency.
China's influence over the Sub-Saharan African country will
likely continue to grow with the deal, which will erase
about $40 million of Zimbabwe's debt, The Washington Post
reports.

The agreement marks the official death of the
Zimbabwean currency, which has been in circulation for 35 years.
In 2009, the country abandoned
the Zimbabwean dollar as its official
currency. Seven months ago, the government
announced it would no longer be legal tender. The
country's central bank then started taking the local
currency out of circulation.

As part of the agreement, the Zimbabwean government
will encourage the yuan's use. In the plan's first
stages, Chinese tourists can use the yuan, and Zimbabwe will
start paying back its debt, Reuters
reports.

The switch to the yuan has apparently been a long
time coming. Zimbabweans have
already been using foreign currencies from the US and South
Africa for
nearly a decade. That, combined with years of extreme
inflation, has made the Zimbabwean dollar virtually
worthless.

Zimbabwe is looking to strengthen ties with the
Chinese government, which has given the African country
more than $1 billion in low-interest loans since 2010. The
Zimbabwean government also wants to
ramp up trade between the two countries. Some
economistsbelieve that China actually makes out better
on the deal, since it will extend its economic power
over Zimbabwe.

The plan is yet another reminder of China's expanding
stake in sub-Saharan Africa. China has been accused of
exploiting Africa's vast mineral and energy resources at the
expense of the environment and its people. Last month,
Chinese President Xi Jinpeg signed 10 agreements, including
a $1 billion loan to build a giant nuclear power plant
in Zimbabwe.

"China is desperate for the consumer goods market,
basically whatever anyone with the buying power can pay
for," economist John Roberston
told Al Jazeera told Al Jazeera. "But people accepting
payment will want it in [US] dollars — as opposed to yuan — and
that will be very damaging to China’s interest here in
Zimbabwe."

This newest deal might be one of the largest efforts by
China to
expand its currency to other countries.
15 nations besides China use the yuan (either
officially or not). In December,
it was named as one of the world's top currencies.

Although it may seem strange for a country to adopt the
currency of another, many similar deals have happened in the
past. Scotland officially uses the British pound, 15 countries
besides France use the franc, and 10 countries use the
US dollar.